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Is the CFA really useful in getting an investment banking job?

Editor's note: As we approach CFA exam time, we felt it was important to share this blog by someone who lived the experience. The following is in her words.

In September 2006, when I was a second-year Goldman analyst, one of my associates texted me to "show off" that he had just passed Level 3 of the Chartered Financial Analyst program. I have to admit that I was jealous! I knew it was a definite plus on his resume because I’d heard that it was extremely challenging.

I thought, "If he has the time to study for the CFA, I can make time too!" It was September already but I still applied for the December 2006 Level 1 exam. I passed. I passed the next two levels in June 2007 and June 2008 respectively.

When I talk about the CFA, I am therefore talking from a position of experience.

What’s on the CFA curriculum?

There is a little bit of everything finance-related.

The beauty of Level 1 is that it is very broad, immensely interesting and really not that difficult. It was through Level 1 that I developed an interest in derivatives. I started trying to move from IBD to the capital markets a few months after I completed the exam – the better working hours were also a huge lure for me.

Level 2 is generally accepted to be the hardest level. It was, for me, also the most boring. There is so much nitty gritty detail on accounting – not my favorite topic.

Level 3 is very focused toward asset/portfolio management. There is lots of in-depth information about how to look at asset portfolios, how to choose between different asset classes and how to manage other people’s money.

How could the CFA help you?

1. It will stand out on your resume

The CFA qualification is well regarded because its modules are highly relevant to different areas of banking and because the CFA Institute only allows the best 35 percent to 45 percent to pass any sitting.

2. Your chances of getting invited to interviews may rise

Case in point: one of my colleagues did his first degree in Lebanon followed by a master’s degree at a good UK university. When it came to looking for a job, he says he didn’t get a single response after sending out his resume so he decided to sign up for CFA Level 1. When he sent his resume out again, he started getting interview invitations. He’s one of the best derivative salespeople I know, so it just goes to show that banks can have trouble sifting through the many applications.

3. It may help you decide where in an investment bank you would best fit

Some bankers think the CFA qualification looks a lot better if you did it while you were working rather than when you were in college or looking for a job. However, I would argue that it adds a lot of value to your resume no matter when you do it. It’s not easy.

4. Your chances of ever becoming unemployed (apparently) fall

Of the 100,000 current full CFA Charter holders globally (i.e., people who completed and passed all three levels of the CFA exams), according to the CFA Institute’s own figures, only 4 percent of them are unemployed at any time.

Do you have to take a taught course in order to pass the CFA?

No. I didn’t and I still passed all three levels the first time. For me, paying someone to teach me would have been a big waste of cash. When I am around other people, I usually want to chat. For the same reason, I also didn’t join any study groups.

What was my strategy?

Time was limited. I didn’t read the CFA’s own materials – they’re too thick. I ordered self-study materials (five books, audio CDs, QuickSheets and practice exams) from Schweser. I studied properly on weekends (both days); during the week, I listened to the audio CDs on my way to work. I was always too tired to do any revision after work.

I took exactly one week off prior to each exam. By this time, I had been through all the study material once. Each time, I created a schedule to ensure this was the case. So what did I do in this one week? Exam practice! One exam per day. As I went through the practice exams, the areas I needed to work on jumped out at me, so I re-read just these modules.

What about my social life?

What social life? I killed it. I went out to dinner a couple of times per month. However, when the CFA was over, "freedom" felt so much sweeter. I took the last exam in June 2008, but even today, four years later, the idea of combining a full-time job with the CFA still gives me the heeby-jeebies.

This article first appeared on Girl Banker’s blog, here.

Editor's final note: We would add that anyone going into wealth management or private banking would also benefit from a CFA since so many wealth managers are now becoming portfolio managers as well.

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